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The Mañana Man Gets Serious--DeWese

April 2001
My writing license requires that I write a serious column once every 10 years. This is it.

Lots of times managers tell me, "Mañana Man, I copied your column last month and gave it to all of our salespeople." Now this is your chance, salespeople. Copy this column and give it to your boss.

The National Association for Printing Leadership (NAPL) sponsored a panel discussion at its annual Top Management Conference in Santa Barbara, CA, this past March. Andrew Paparozzi, NAPL's chief economist, invited me to participate on the panel, but other events prevented my attendance. Andrew sent me the panel questions and I responded with the answers you will read below. The panel topic, "Building Value in Printing Companies," has application not only to owners, but also to managers, salespeople and all company personnel.

1--What are the characteristics of a valuable printing company?

"Valuable" printing companies have a demonstrated record of consistently meeting the needs of their customers. These companies first seek to satisfy customers in the market(s) they serve in order to build relationships rooted in loyalty. Simultaneously, these companies, using human respect, sound motivational practices and outstanding management practices, build employee satisfaction and, hence, employee loyalty.

These companies then, as a result of satisfying the customer and employee constituencies, earn superior profits. All valuation methods eventually emanate from profitability. Valuable printing companies also have histories of consistent profitability and have what is known as "quality of earnings." Quality of earnings implies that a company's earnings are not vulnerable to precipitous reductions, nor are they short term in nature. The more valuable companies have proven, year after year, that they are capable of earning superior profits.

2--What does "building value" mean? And why is building value important?

First, "building value" in a privately held corporation defines the activity of increasing the value of the shareholders' equity investment in the corporation. If that value is to be realized in the sale of the company, it means maximizing the "market value" of the equity in a transaction between a willing seller and a willing buyer operating at arm's length. The analogy for building value in a privately held company is precisely the same as that of an investor who seeks appreciation in his or her investment in a mutual fund or shares of a publicly traded stock.

This concept is important to the owners of privately held companies especially, but not limited to the printing industry. This is because many owners do not see themselves as investors, but rather as "business operators" who merely earn a living from the business.
 

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